From Krispy Kreme to GoPro, has meme-stock trading frenzy returned?
But the latest meme-stock rally could be even bigger than its predecessor four years ago, when investors piled into recognizable but unloved stocks, such as the video games retailer GameStop and the movie theatre chain AMC, according to the founder of the Reddit forum that helped whip up the frenzy.
Retailer Kohl's, camera firm GoPro, fast-food chain Wendy's and doughnut chain Krispy Kreme each staged rapid rallies this week, driven by abrupt surges in trading volume reminiscent of the the meme-stock craze of 2021, when social media memes boosted a collection of struggling stocks, triggering extraordinary and volatile leaps in value.
Actress Sydney Sweeney helped bring clothing retailer American Eagle Outfitters into the mania after it was announced the Euphoria and White Lotus star would front the brand's latest marketing campaign. The company's shares surged about 10% in trading on Thursday.
Meme stocks are 'about to leap-frog in size and scope and scale, so that retail traders are going to redefine what matters', according to Jaime Rogozinski, founder of the wallstreetbets Reddit forum behind many of the volatile rallies.
'The world of finance is clearly changing, with blockchain technologies encroaching, and AI agents that trade on their own,' he said. 'And the collective of retail traders is adapting along with it.'
Rogozinski founded wallstreetbets in 2012, but said Reddit ousted him as a moderator in 2020. His bid to sue the social media company for trademark infringement was dismissed by the US court of appeals for the ninth circuit last month.
The forum's users home in on stocks and share their own research. 'It's a decentralization of power of who can be financial analyst,' said Noor Al, a moderator on wallstreetbets. 'Great ideas can now come from anyone, anywhere.
'We're seeing the power of retail push stocks, sometimes to the tune of billions of dollars, through the power of ideas, the power of community and the power of the people,' he added.
The meme-stock craze of 2021, which produced stars such as Roaring Kitty, was a product of the Covid era, when many amateur traders were stuck at home and flush with pandemic stimulus cash.
Whether this latest frenzy produces similar winners is not yet clear. Kohl's finished the week up 32%, GoPro was up 66% and Krispy Kreme was up 41%. The rallies show some investors are willing to take on more risk, as stocks scale record highs and the market, dominated by big tech, becomes harder to beat.
Often, meme-stock bets are unbound from economic fundamentals, as investors move to support a brand for romantic or ideological reasons. Donald Trump's Trump Media & Technology Group, home to Truth Social, is valued at more than $5bn on quarterly revenue of about $1m.
The wallstreetbets ethos 'has always to some extent been about flaunting and exploiting the ironies, relevance or irrelevance' of the stock market, said Rogozinski, who pointed to Wendy's, the hamburger chain, as a good example. 'Wendy's has always been a meme that goes back a decade. It brings a smile to my face, because on Reddit there's always been this thing where they say: 'Sir, this is a Wendy's.'
'It's an inside joke, and I don't even get where it started. It's just a meme,' he added. The stock's fleeting rise – it rallied 10% in two days, but finished the week broadly flat – shows some retail investors do not necessarily care about the typical factors that drive the market, such as tariffs and war in the Middle East. 'It's this ability for us to almost make fun of the financial system.'
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
Long-term institutional players will always get the last laugh, Rogozinski conceded, because prices will return to normal valuations. 'But in the short term there's lot of money to be had with this volatility, and the fact that stocks are able to move up and down with such ease is but a mere showcase for how the financial system needs a facelift in relevancy.'
While current market conditions do not replicate the low interest rates and retail investor buoyancy of the Covid era, market records and a robust economy have made meme stocks attractive once again for some. 'You see all these indications where this is full-blown meme mania,' Brent Kochuba, founder of derivatives-data firm SpotGamma, told Bloomberg.
'The macro economic environment really favors the retail and speculative plays,' agreed Al. 'I think were only going to see more speculation and excitement. It's a good time to tune in, because retail players can react and provide insight faster.'
Days traders are not necessarily bothered by a company's financial performance, said Rogozinski. 'You have this activist, elective investor who is saying, 'I don't care what the financial statements look like, I don't care what the discounted cashflow is, I like the food, I like the video-game store, I like the meme. So dude, you can go back to Excel spreadsheets if you want, but I really like the chicken tenders,'' he said.
There is now a 'third component' to investment, beyond supply and demand, he claimed, 'which is, 'dude, I don't care if you think it's going to go up or not, or if they have assets or liabilities. I care about this company and I'm going to help it out. I'm going to go buy my jeans from American Eagle.''
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
2 minutes ago
- Telegraph
The $6tn bank tweak that risks triggering the next crisis
Bair's big fear is that the money won't end up being funnelled back into boring bonds at all, but end up lining shareholders' pockets or in more exotic investments. She says: 'Banks will likely find a way to distribute some of it to shareholders, or otherwise deploy it into their market operations which are riskier and more vulnerable to crisis conditions than insured banks.' Covid buffer Those who back removing Treasuries from the calculations highlight that it was done during the pandemic without much fanfare as banks ploughed more money into bonds. However, analysts at Morgan Stanley have highlighted that this was in part a function of a 21pc jump in bank deposits as workers had nowhere to spend their cash during lockdowns. It recently noted: 'The Covid-related surge in deposits means that 2020-21 is not comparable with today's environment, as deposit growth is tepid at 1pc year-on-year. Deposit growth, combined with loan demand, are key drivers of bank demand for securities as banks will prefer to use deposits to support client lending activity and build client relationships.' Bair says capital buffers were put there for a reason. 'If there should be a future crisis, regulators have the authority to provide emergency temporary relief. 'Reduce capital requirements now, they don't know how banks may deploy it. Better to maintain strong requirements in good times so capital cushions will be there when bad times hit.' Regulators are also keeping a close eye on this side of the Atlantic amid concerns we are moving towards a world where sovereign risk is completely removed from the leverage ratio. While the UK has already taken steps to remove central bank reserves from its calculations, officials here believe removing government bonds would be a step too far. Rogoff, now a Harvard professor, agrees that capital buffers have served their purpose during times of crisis. 'It is notable how well the banking system held up during the pandemic, and later from the sharp rise in global interest rates. It is precisely when the system hits peak stress moments – especially when the economy is hit by completely out of the box shocks – that the SLR suddenly does not seem quite so crazy,' he says. The rules tweaks may look benign, but bond sell-offs are often quick and violent. And it's usually the taxpayer left picking up the pieces.
Reuters
32 minutes ago
- Reuters
Trump pauses export controls to bolster China trade deal, FT says
July 28 (Reuters) - The U.S. has paused curbs on tech exports to China to avoid disrupting trade talks with Beijing and support President Donald Trump's efforts to secure a meeting with President Xi Jinping this year, the Financial Times said on Monday. The industry and security bureau of the Commerce Department, which oversees export controls, has been told in recent months to avoid tough moves on China, the newspaper said, citing current and former officials. Reuters could not immediately verify the report. The White House and the department did not respond to Reuters' requests for comment outside business hours. Top U.S. and Chinese economic officials are set to resume talks in Stockholm on Monday to tackle longstanding economic disputes at the centre of a trade war between the world's top two economies. Tech giant Nvidia (NVDA.O), opens new tab said this month it would resume sales of its H20 graphics processing units (GPU) to China, reversing an export curb the Trump administration imposed in April to keep advanced AI chips out of Chinese hands over national security concerns. The planned resumption was part of U.S. negotiations on rare earths and magnets, Commerce Secretary Howard Lutnick has said. The paper said 20 security experts and former officials, including former deputy US national security adviser Matt Pottinger, will write on Monday to Lutnick to voice concern, however. "This move represents a strategic misstep that endangers the United States' economic and military edge in artificial intelligence," they write in the letter, it added.
Reuters
32 minutes ago
- Reuters
Forvia's cost and cash discipline drives near 8% rise in H1 core profit
July 28 (Reuters) - France-based car parts supplier Forvia ( opens new tab reported a 7.8% rise in its half-year core profit on Monday, led by cost cuts. Forvia's earnings before interest, taxes, depreciation and amortization (EBITDA) grew to 1.76 billion euros ($2.07 billion)in the first half of 2025, from 1.64 billion a year earlier. It said tariffs had no material impact thanks to effective counter measures, including strict cost and cash discipline, but they had delayed tenders especially in North America. Forvia booked new orders worth 14 billion euros in the first half, compared to 15 billion a year ago. It still confirmed its full-year 2025 guidance. Stellantis ( opens new tab announced mid-July the termination of its hydrogen fuel cell technology development program, impacting its SYMBIO joint venture with Forvia and Michelin ( opens new tab that relies on the carmaker for more than 80% of its business. "Forvia booked a non-cash depreciation of the financial assets related to the joint venture, consolidated under equity method, for 136 million euros," the group said in a statement. ($1 = 0.8511 euros)
